Digirad (NASDAQ:DRAD) and AxoGen (NASDAQ:AXGN) are both small-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, risk, analyst recommendations and profitability.

Institutional & Insider Ownership

54.8% of Digirad shares are held by institutional investors. Comparatively, 82.8% of AxoGen shares are held by institutional investors. 9.1% of Digirad shares are held by insiders. Comparatively, 7.9% of AxoGen shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Digirad and AxoGen’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digirad $118.34 million 0.25 -$35.73 million N/A N/A
AxoGen $60.43 million 21.55 -$10.44 million ($0.31) -109.61

AxoGen has lower revenue, but higher earnings than Digirad.

Dividends

Digirad pays an annual dividend of $0.22 per share and has a dividend yield of 15.2%. AxoGen does not pay a dividend.

Analyst Ratings

This is a breakdown of recent ratings for Digirad and AxoGen, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digirad 0 0 0 0 N/A
AxoGen 0 0 7 0 3.00

AxoGen has a consensus price target of $44.67, suggesting a potential upside of 31.45%. Given AxoGen’s higher probable upside, analysts clearly believe AxoGen is more favorable than Digirad.

Profitability

This table compares Digirad and AxoGen’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digirad -24.22% -6.52% -3.34%
AxoGen -24.96% -26.50% -17.39%

Volatility & Risk

Digirad has a beta of 2.32, suggesting that its share price is 132% more volatile than the S&P 500. Comparatively, AxoGen has a beta of -0.39, suggesting that its share price is 139% less volatile than the S&P 500.

Summary

Digirad beats AxoGen on 7 of the 12 factors compared between the two stocks.

About Digirad

Digirad Corporation provides healthcare solutions in the United States. It operates through Diagnostic Services, Mobile Healthcare, and Diagnostic Imaging segments. The Diagnostic Services segment provides nuclear and ultrasound imaging services to physicians who perform nuclear imaging, echocardiography, vascular or general ultrasound tests, imaging systems, radiopharmaceuticals, and licensing services, as well as offers remote cardiac event monitoring services. The Mobile Healthcare segment offers contract diagnostic imaging services, including computerized tomography (CT), magnetic resonance imaging (MRI), positron emission tomography (PET), PET/CT, and nuclear medicine and healthcare services to hospitals, integrated delivery networks, and federal institutions on a long-term contract basis, as well as provisional services to institutions that are in transition. The Diagnostic Imaging segment develops and sells gamma camera imaging systems, such as nuclear cardiac imaging systems and general purpose nuclear imaging systems to physician offices and hospitals; and offers camera maintenance services. Digirad Corporation was founded in 1985 and is headquartered in Suwanee, Georgia.

About AxoGen

AxoGen, Inc. develops and markets surgical solutions for peripheral nerve injuries. The company's surgical solutions include Avance Nerve Graft, an off-the-shelf processed human nerve allograft for bridging severed nerves without the comorbidities associated with a second surgical site; AxoGuard Nerve Connector, a porcine submucosa extracellular matrix (ECM) coaptation aid for tensionless repair of severed nerves; and AxoGuard Nerve Protector, a porcine submucosa ECM product that is used to wrap and protect damaged peripheral nerves, as well as reinforces the nerve reconstruction while preventing soft tissue attachments. Its solutions also comprise Avive Soft Tissue Membrane, a minimally processed human umbilical cord membrane that can be used as a resorbable soft tissue covering to separate tissues and modulate inflammation in the surgical bed. In addition, the company offers AcroVal neurosensory and motor testing system, which consists of AcroGrip for use in hand grip strength measurement; AcroPinch for measuring pinch strength; and Pressure-Specified Sensory Device, a somatosensory evaluation and measurement device. Further, it provides AxoTouch two point discriminator, a tool that is used for measuring the innervation density of surface area of the skin. The company provides its products to hospitals, surgery centers, and military hospitals in the United States, Canada, the United Kingdom and other European countries, and internationally. AxoGen, Inc. is headquartered in Alachua, Florida.

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